PARIS, Jan 15 (Reuters) - French carmaker Renault
is aiming to cut 7,500 jobs on its home patch by 2016 to help
boost competitiveness as the slump in its domestic and European
markets shows no sign of easing.

The job cuts, which are equivalent to 14 percent of
Renault's French staff, will be a further blow to President
Francois Hollande, who has made creating employment his priority
for this year as the jobless rate reaches 13-year highs.

Renault is pushing workers to accept a new nationwide deal
on pay and conditions to cut costs and align productivity with
cheaper European sites such as its Palencia plant in Spain and
alliance partner Nissan's Sunderland factory in England.

The company hopes about three-quarters of the cuts will be
achieved through normal staff turnover, a Renault spokeswoman
said on Tuesday following the latest in a series of meetings
with unions.

Automakers across Europe are having to cut costs and
capacity so they can still turn a profit while the euro zone
debt crisis and resulting government austerity measures sap
consumer demand. Car sales in France, Spain and Italy fell to
their lowest levels in years in 2012.

Rival French carmaker PSA Peugeot Citroen is
struggling to reverse mounting losses by scrapping more than
10,000 domestic jobs and closing an assembly plant near the
French capital.

Japanese carmaker Honda on Friday unveiled plans to
cut around 800 jobs at its plant near Swindon in southwest
England due to falling demand for its vehicles across mainland
Europe.

OVERCAPACITY

Renault, which had some 128,000 employees worldwide at the
end of 2011, said it did not plan any compulsory or voluntary
redundancies. It also repeated that if it reached a deal with
workers, it would forego any site closures in France.

A further meeting is planned with Renault management on Jan.
22.

"It's a reasonable adjustment taking into account the
massive overcapacity that the (mass-market carmakers) are facing
in Europe," said Macquarie Securities analyst Jens Schattner.

"It gives them annual cost savings without having to reduce
aggressively - there will probably be only limited cash out for
restructuring charges."

Shares in Renault closed 1.8 percent higher, outperforming
the European sector index, which up 0.1 percent.

"We have reaffirmed our desire to maintain Renault's
corporate and core activities in France, whilst taking the
necessary steps to lower the break-even point," Gerard Leclercq,
chairman of Renault's France operations, said in a statement.

The job cuts would rise to 8,200, or 15 percent of French
staff, excluding new hires over the next four years, according
to CGT union representative Fabien Gache. "This is a fresh
bloodletting among staff which will weaken Renault further over
the coming years," he said.

French car registrations fell 15 percent last month, leaving
the full-year down 14 percent to 1.9 million vehicles - the
lowest since 1997 - French industry group CCFA said. Renault
group's French registrations plunged 27 percent in December.

Hollande's administration is struggling to stop losses of
industrial jobs while curbing public spending and raising taxes
to try to slash debt in a stagnant economy.

The government pledged this month to reallocate 2 billion
euros ($2.7 billion) from its 2013 budget to state-aided job
creation.

Finance ministry officials were not immediately available
for comment.

Renault has forecast positive free cash flow for 2012. Its
sales in the third quarter of last year fell 13 percent for a
nine-month decline of 4.7 percent to 29.4 billion euros.
($1 = 0.7482 euros)
(Additional reporting by Christian Plumb; Editing by Erica
Billingham)